ARLINGTON, Va.—High-speed rail is coming to America—but not without the cooperation of five Class 1 freight railroads in North America, the nation’s top transportation official says.

Transportation Secretary Ray LaHood recently held what he termed a “very good” meeting with representatives of the freight railroads, who are seeking compensation for giving up some rights of way along their network of track.

“We need a strong freight railroad sector,” LaHood said after his speech at the NIT League spring policy forum on June 10 outside Washington. “But we also need them to jump-start high-speed rail.”

Asked what specifically he wants the freight railroads to give up in exchange for rights, LaHood said: “It’s not a matter of giving anything up.” Rather, he said, he was seeking the freight railroads’ cooperation in jump-starting the nation’s first high-speed rail network along four major corridors.

LaHood reiterated his support for development of a network of high-speed rail projects and said he recently held a “very good” meeting with representatives of the five Class 1 freight railroads. Their cooperation is necessary in order to improve the infrastructure to support high-speed rail projects, LaHood said.

“We can’t get into the high-speed rail business without the cooperation of our friends in the freight railroad sector,” LaHood said in his speech to NIT League members. “Between freight and passenger rail, Amtrak, America is getting into the high-speed rail business.”

DOT already has allocated $8 billion for high-speed rail. Another $2.5 billion is proposed to be invested this year, LaHood said.

“America is going to be in the business of high-speed rail,” LaHood said. “We’re at the same point now where we were during the Eisenhower administration when the Interstate Highway System was in its infancy,” the DOT secretary said.

LaHood predicted that “two decades from now, the lion’s share of America” will be connected with high-speed rail.

“That’s what Americans want,” LaHood said.

But first, he said, the freight railroads have to climb aboard the high-speed train.
“We had a very good meeting with the Class 1 railroads,” LaHood said, adding that DOT is committed to investment in multimodal transportation projects.

On another major concern, LaHood said there is progress and consensus on the next highway bill, although not on how to fund it. House Transportation and Infrastructure Committee Chairman Rep. James Oberstar, D-Minn., already has proposed a $500 billion program to replace the current five-year, $286 billion highway bill that expired last Sept. 30.

“As soon as we can find $500 billion, we’ll have a bill on the president’s desk to sign,” Transportation Secretary LaHood said.

The current system of funding the Highway Trust Fund through the federal tax on motor fuels—18.4 cents on gasoline, 23.4 cents on diesel, unchanged since 1993—is “deficient,” LaHood said. The Obama administration has resisted raising that tax as the nation struggles with the aftermath of the recession.

“The president doesn’t want to raise taxes,” LaHood said. “It’s not for a lack of ideas and it’s not for a lack of needs. In Washington, we agree on what needs to be done in transportation. We need to find $500 or $600 billion.”

One state transportation secretary said there is a “real need at the federal level” to fund transportation infrastructure.

“We are concerned about highway reauthorization,” said Sean Connaughton, Virginia’s transportation secretary. “We’re concerned that there doesn’t seem to be a national vision.”

Other top transport officials say a well-funded highway bill is essential to ensure shippers have adequate infrastructure for their freight needs—on highways, rails, air and waterways.

“It’s imperative that freight is well represented in the next round of transportation funding,” says Kurt J. Nagle, president and CEO of the American Association of Port Authorities, said.

State fuel tax revenues have declined 10 percent, despite higher levels of auto registration. But because cars are getting higher mileage, revenue from the state fuel tax has not kept pace with inflation, he said.

“The gas tax is not a sustainable source of revenue for our transportation projects.” Connaughton said. More tolls and higher user fees are likely to increase to support fuel tax revenue, he said.

The Obama administration’s 17 months have been among the DOT’s “most significant since it was founded in 1966,” LaHood said.

Among 14,000 recovery act projects up and running from the economic stimulus package passed last year, many improve shippers’ lives. LaHood says he has traveled to more than 30 states and says he constantly runs into people who thank him for helping reduce the stubbornly high unemployment rate.

“All told, we have a pretty good record so far especially at time of economic challenges,” LaHood said. “We’re just getting started.”

Transportation is a means to improve people’s lives, LaHood said.

“Goods movement is a part of a larger system,” LaHood said. “Companies need end to end logistics solutions. The better ports, roads and railroads are, the better the system works.”

LaHood said some $28 billion received in economic recovery plan already given to states as part of American Recovery and Restoration Act. There is also a new series of DOT funding programs called “TIGER” grants. LaHood highlighted three major programs begun at DOT for infrastructure funding:
1-Out of DOT $1.5 billion in TIGER grants, half went to benefit freight, including six port projects in California, Oregon, Maine, Illinois and elsewhere. “Where I come from in Illinois, $1.5 billion is a lot of money,” LaHood said. “If you look at the way we spend the $1.5 billion, we did some very creative things.”
2-Released draft guidance for $600 million in second round of Tiger grants. These TIGER II grants will “improve” more intermodal connections around the country, LaHood said.
3-DOT has proposed an infrastructure bank to help fund multimodal projects to provide “substantial” economic bank, LaHood said.

President Obama has recommended a $4 billion budget for that infrastructure bank. That would be included in DOT’s current $70 billion budget and be used to fund “big, significant projects,” LaHood said.

“We know the highway trust fund is not adequate for what we want to do,” LaHood said. “We want to get there. I believe we can get there. We need to think outside the box. We don’t have the kind of resources we used to have. We are proud of the investments we made in the Class 1 railroads,” LaHood said.

“These investments do not favor one mode over another,” LaHood said. “We’re focusing on achieving the right investments at the local levels. High-speed rail is central to this. Investments in high-speed rail don’t just give passengers more options. It improves the infrastructure for the freight railroads.”

Recently the American Trucking Associations complained to LaHood that the DOT might be discriminating against the trucking industry, which controls nearly 80 percent of freight by revenue.

LaHood said trucking will remain the essential mode of freight transport for the foreseeable future.

“We’re going to continue to promote all modes of transportation,” LaHood said. “There’s no other ways to get things to grocery stores than trucks. We’re not going to get there with bikes. We know the trucking industry is very important. We’re not going to overlook the type of commitment that those of you in the trucking industry have made. Trucking is a very important part of the overall transportation network in this country—always has been always will be.”

July 19, 2010

About the Author

John D. Schulz

John D. Schulz has been a transportation journalist for more than 20 years, specializing in the trucking industry. John is on a first-name basis with scores of top-level trucking executives who are able to give shippers their latest insights on the industry on a regular basis.

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